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1994 (4) TMI 170 - SC - VAT and Sales TaxWhether rubber sheets of various grades supplied by the State of Karnataka or the Karnataka Forest Plantation Corporation to the private limited companies, were Forest Produce within the meaning of the Karnataka Forest Act, 1963 and hence liable to payment of forest development tax under Section 98A thereof? Held that:- Neither reasoning of High Court appears to be well founded. The meaning of the word `caoutchouc’ has been discussed. Latex is the modern name for caoutchouc. It is nothing but natural rubber. Caoutchouc or latex means not only milky substance obtained from the trees but it included all milk substance processed, till it is made marketable. Since the processing does not result in bringing out a new commodity but it preserves the same and renders it fit for being marketed, it does not change its character. It was caoutchouc or latex when it was obtained from the trees, it continued to be caoutchouc or latex when it was treated by sulphuric acid and continued to be so even after it is dried with smoke to obtain the shape of sheets. The test of commercial parlance while considering entries in Sales Tax Act was evolved as the tax under the Sales Tax enactments is normally either on sale or purchase or on manufacture or import etc. Therefore, it is the understanding or the knowledge of the item by the common man or persons dealing in it in the market and not in the technical or botanical sense which was accepted by this Court as the deciding factor. But that test cannot be applied while considering the definition of forest produce. Appeals allowed. The order passed by the High Court is set aside.
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